How Google’s Chrome plans will impact publishers, ad blockers, and the web

I’ve spent the last two years fighting in the ad-block trenches, so I’ve gotten lots of questions about Google’s recent announcement that new Chrome ad blocking options are on the way and what that means for publishers, ad blocking, and the industry as a whole.

Before we get into that, though, let’s go over the key points of Google’s announcement:

1. Ad blocking/ad filtering feature built into Chrome. This is getting a lot of coverage because it sounds controversial to say Google is building an ad blocker, but the concern is largely overblown.

By default, Chrome will prevent all ads from loading on any website that doesn’t conform to the Initial Better Ads Standards published by the Coalition for Better Ads. These standards aim to eliminate ad formats that block content, disrupt the user’s experience, or generally annoy users. Most publishers will not be impacted by the move, but it will force those with bad ad experiences to clean up their act.

It’s a smart move by Google, but it’s about five years too late. It’s likely to slow (or maybe even stop) the growth of ad blocking, but it’s difficult to imagine that existing ad block users will spontaneously uninstall their ad blockers because of it.

Some have speculated that there are anti-trust concerns if Google is playing the role of arbiter. However, I’m not in that camp. Google’s dominance in the market is already established, and it stands to lose far more if it abuses its new power than it could possibly gain.

2. Funding Choices. Google will launch a Chrome feature next year that allows a publisher to wall off content from ad block users unless they disable their ad blocker or pay up via Google Contributor (in which case, Google gets a cut).

More than likely, the reason for baking the feature into the browser is to make it impossible for ad blockers to circumvent.

Google will make this available to publishers in the form of a product called Funding Choices. Publishers who sign up will be able to stop any Chrome user with an ad blocker from accessing their content unless the user turns off their ad blocker or pays.

What this means for publishers

If Funding Choices is wildly successful, it could take a significant bite out of global ad-block rates, and publishers around the world will rejoice.

Unfortunately, there’s a lot of evidence to suggest Funding Choices is unlikely to succeed because:

a) Many have tried and failed
Google is not the first to try this approach. There’s a graveyard full of anti-ad block vendors who banked on the strategy. Of those who remain, few still offer this product.

One such company experimented with the strategy for years. Today, they claim it results in bounce rates as high as 74 percent and recommend ad recovery (AKA ad reinsertion) as the only viable solution for publishers.

Anecdotally, I’ve discussed the topic with a couple hundred publishers during my time in the space. Of the ~40 who tried the strategy, only one continues to make use of it.

Contrast this with Facebook’s approach. Last year it built its own ad reinsertion tech in-house, and its desktop revenue grew by 18 percent quarter over quarter.

Facebook hasn’t released any data on whether the move affected user engagement; however, we’re probably safe to assume it would have reversed the decision if it had scared users off.

While some view the ad reinsertion approach as the more antagonistic option, it’s inherently less intrusive than Funding Choices, because it doesn’t require a user to change their behavior.

b) Publishers must adopt en masse for it to succeed. If you accept the evidence that shows a turn-off-your-blocker-or-pay-up approach results in high bounce rates, there’s an important corollary: If the user has the option to go elsewhere to consume content, most ad block users will choose that option over paying or disabling their blockers.

What’s more, research from one of the major ad blockers last year showed that only 22 percent of its users were willing to pay anything for an ad-free experience. It logically follows that a given publisher who adopts Funding Choices before it’s widespread can expect the majority of its ad blocking audience to bounce.

In other words, on the micro level, it’s disadvantageous for any individual publisher to be an early adopter on this. In fact, it’d be in a publisher’s best interest to hold out until adoption is near-universal.

Granted, if anyone has the reach to achieve universal adoption, it’s Google. But it’s difficult to believe that’s achievable when there’s a clear incentive to being amongst the last to adopt.

c) It has no utility for many publishers. Ad block users might be willing to compromise for a favorite publisher, but most long tail publishers simply don’t have the cachet or premium content to convince users to pay up or change their behavior.

What’s more, Funding Choices is counter-productive for retail publishers, for whom it makes no sense to turn prospective customers away or charge them for the privilege of browsing their wares.

d) It doesn’t solve all the user’s problems. While Chrome’s new ad filtering feature will eliminate some of the experiences that drive users to block ads, this approach does little to address legitimate user concerns around performance and privacy.

Load times will improve as server-to-server integrations become the industry norm, but this still won’t resolve the underlying performance issues that result from packing creatives to the brim with third-party trackers that load from dozens of domains.

Apple’s move to further block or limit third-party tracking within Safari shows it understands something Google doesn’t and will hopefully prompt further innovation around the problem.

e) User blowback is a risk. There’s a very real threat that some users will ditch Chrome if Funding Choices starts to see broad adoption. Whether that would be 2 percent or 20 percent of Chrome’s market share is impossible to know, but if that starts to happen, you could see Google change its game plan to stop the bleeding.

Either way, keep an eye on the latest entrant into the browser market, Brave; It’s in a great position to attract disgruntled Chrome refugees.

What it means for the ad blockers

While Google isn’t doing something as overt as banning ad blocking extensions, It is unmistakably trying to wipe out any existing leverage held by companies like Eyeo, maker of Adblock Plus.

Chrome’s ad filtering aims to make ad blocking unnecessary, and building Funding Choices into the browser is a clear attempt to cut off the ad blockers up-funnel. This new dynamic tips the scales heavily in Google’s favor, but don’t expect the major ad blockers to go quietly into the night.

What it means for the industry

Expect the ad block/anti-ad block space to heat up over the next 12 months. Regardless of how successful Funding Choices is, Google is sending a clear signal to the market that it intends to not only solve the ad blocking issue but also to capitalize on the revenue opportunity it represents.

Its competitors are now under pressure to do the same, or lie down and accept that they’re okay with Google being the gatekeeper to the content consumption experience for the 60 percent or so of the world that uses Chrome to surf the web.

Martin Kratky-Katz is cofounder and CEO at Blockthrough. He’s a third-time startup founder and a recipient of a “Forty Under 40” award.

Blockthrough helps online publishers recover the revenue they’re losing to adblockers while solving the problems that drove users to block ads in the first place. Want to know more? Contact us

When it comes to adblocking, there are a lot of misconceptions floating around. It’s time to dispel some myths and share some interesting facts that may surprise you.

1. Adblock Users Are Not Anti-Advertising

For the most part, adblock users are not against advertising. However, they are against interruptive ads, spy/malware, privacy invasion and ads that slow down the sites they’re visiting¹. Only 6% of adblock users are totally opposed to all forms of online advertising.

2. Adblock Users Are Not Techies Who Haven’t Left Their Basement in 2 Years

a. Adblock users come from all walks of life and age groups. Recent research shows that Millennials have the highest percentage of adblock usage (as much as 66% use one )².

b. Adblock users tend to be more educated – according to recent reports, 45% of them have a bachelors degree or higher.

3. Publishers’ Google Analytics Data Is Affected

Adblockers not only block ads, but some also block Google Analytics, so many publishers’ Internet traffic statistics may be inaccurate.

4. Adblocking Is Not a Fad

Adblocking rates continue to grow globally and in the US, the rate is expected to surpass 30% in 2017³.

5. Top 5 Ways People Hear about Adblockers⁴:

a. Friend or family member is using one

b. Browsing the Web

c. Social Media

d. Web Store

e. News Article

6. Verticals with the Highest Percentage of Adblocking⁵:

a. Gaming

b. Tech

c. Comics

d. Entertainment

7. Users Can Block Ads Using Different Technologies, Including:

a. Browser extensions (most popular)

b. Mobile apps

c. Proxy-based blockers

d. Network-level blockers

8. Adblocking Is Illegal in China

As of September 2016, adblocking is illegal in China

9. Most Adblockers Do Not Block all Ads

Some adblockers selectively let through ads which they deem to be nonintrusive, though they generally charge publishers and their adtech partners a “whitelisting” fee for this. However, this whitelisting does not address user concerns around privacy, malware or slow page load times.

Great article from techcrunch about how Facebook has manage to increase their ad revenue by leveraging their anti-adblock technology. We think this trend will continue across more publishers in the months and years to come.

Ad blocking is a potentially existential threat to the industry. To combat it effectively, it’s essential to distinguish ad blocking’s two sources.

As abetted by for-profit technology companies, ad blocking is robbery, plain and simple – an extortionist scheme that exploits consumer disaffection and risks distorting the economics of democratic capitalism.A primary culprit is unethical technology companies seeking to divert ad spending into their own pockets. Claiming to represent the interests of consumers and cloaking themselves in the ill-defined mantle of “better advertising,” several of the largest and most prominent distributors of ad-blocking software are shaking down publishers for payments to circumvent their barriers.Advertising pays for the ability for nearly anyone around the world to type in any URL and have content of unimaginable variety appear on a screen. Advertising also subsidizes the cost of apps, which can take hundreds of thousands of dollars to produce, but are often free or low-priced. Without advertising, digital content and services either will vanish, or the cost for their production and distribution will come directly from consumers’ wallets.Of even greater importance is the impact on the economy itself. Advertising represents $350 billion of the U.S. gross national product, and consumers depend on it to help make $9 trillion of annual spending decisions.

When implemented by consumers, ad blocking is a crucial wakeup call to brands and all that serve them about their abuse of consumers’ good will.Ad blockers are also exploiting a real vulnerability: the erosion of stimulating consumer experiences online. For this, the marketing-media ecosystem bears real responsibility.IAB research shows ad-block use is caused by a general disdain for advertising and concern about the safety of user information. In our nationally representative survey, 89% of respondents who have installed ad-blocking technology reported using ad blockers to improve their experience. The ads deemed most intrusive are video ads that play automatically, screen takeovers, and blinking ads — all ad types that directly disrupt the consumption of content.These findings should be an alarm to everyone in media and marketing: We are mistreating our most valuable asset — our consumers. We can talk all we want about the ad-centered “value exchange” between consumers and media. But until we commit to the cause of ever-improving user experiences, advertisers and media will be at risk.

Our industry should focus on identifying and correcting business practices and their enabling technologies that objectively degrade users’ experiences with digital media. Here are some places to start:

The rapid race for consumer data must stop slowing the internet down. Everyone wants to own “insights” about the user, the ad and the site. But each digital ad is lugging around so many companies’ requests for data that the ads are physically, literally impeding the delivery of content. Data calls must be limited, ideally through a consensus-based standard-setting process or best practices. The industry needs to become better at using data — and at using less of it.

Ads should only load when they’re about to be viewable, not before. Pre-loading ads not in view slows sites down, prioritizing advertising over people’s desire to get to the content quickly.

Advertisers and their agencies should voluntarily abandon the most upsetting forms of digital disruption. While autoplay video ads may work in some mobile in-stream environments where a consumer can swipe them off the scream quickly, it may be time to retire autoplay in other contexts. Flashing, blinking intrusive ads also should be considered grade-school creativity, not worthy of a profession that aspires to cultural significance — and profits from making clients’ brands admired and liked.

Finally, publishers must take control of their site experiences, and turn down advertising that doesn’t meet their standards for user engagement. That might sound controversial, but it’s not. TV networks, newspapers and magazines have had advertising acceptability departments for decades. And if we’ve learned anything from the rise of native advertising, it’s that the “Vogue effect” — in which great advertising enhances the value of the publisher’s offering — is applicable in digital media, too.

If the industry doesn’t change its ways, rest assured, the cost of advertising will climb inexorably, for brands and all that support them. Scalable ads will have to be replaced by more handcrafted native ads. Extortion payments to blockers will become routine, as retail slotting fees have become routine in the consumer goods industry. Ad-block profiteers and publishers will engage in an endless technology arms race. The internet may survive as a mass communication tool, but it’ll look much different, even perhaps post-apocalyptic.